2nd in Britain and 5th in Europe

[James1979]

um... no, it's correct.

to acquire the club at any state other than the one that the books give would require negotiation. so if the books say there is a debt to 'total soccer growth', then there is a debt to 'total soccer growth' that must be met. as i said, this would almost definitely discussed as part of any sale with the incoming buyer looking for the seller to write-off the debt (bear in mind that the debt is to ruben's company - not to uncle tony, not to amit etc) and, in the real world, any buyer who is not spectacularly thick would walk away if the debt isn't written off/substantially reduced.

interest is charged to the profit and loss account regardless or not of whether it's actually paid. in the most recent accounts, it was added to the principle element of the debt (pumping up the £34m principle debt to give a total shareholder debt of £35.6m) rather than paid in cash. that will continue to be the case until it's either written off or repaid. repayments can be financed through other avenues than from profits generated - asset stripping (more thinking about the stadium than players), bank loans etc etc.

I have never seen that in any transaction that I have worked on. The shareholder debt is part of the equity waterfall. You also mentioned that debtors were included in debt earlier, so I have my doubts on your comments to be honest.

[klonk]

I have never seen that in any transaction that I have worked on. The shareholder debt is part of the equity waterfall. You also mentioned that debtors were included in debt earlier, so I have my doubts on your comments to be honest.

thanks james, that's terribly condescending of you to say so.

long-term liabilities are long-term liabilities, not equity. this point is a fairly basic statement of fact. shareholder loans are often reclassified as part of takeover plans following negotiation, but you are making out that this is something that happens automatically - total conjecture on your part.

i didn't say that debtors were included in debt. i set out the balance of short-term debtors to give some context to the gross short-term debt position.

if it helps you sleep at night, i'm sure that you really know your way around a set of accounts better than anyone else and are proper awesome.

[James1979]

thanks james, that's terribly condescending of you to say so.

long-term liabilities are long-term liabilities, not equity. this point is a fairly basic statement of fact. shareholder loans are often reclassified as part of takeover plans following negotiation, but you are making out that this is something that happens automatically - total conjecture on your part.

i didn't say that debtors were included in debt. i set out the balance of short-term debtors to give some context to the gross short-term debt position.

if it helps you sleep at night, i'm sure that you really know your way around a set of accounts better than anyone else and are proper awesome.

Debtors are a current asset and part of working capital!

Shareholder loans are normally long term liabilities but they should always be included in the bridge to Equity. Shareholder loans are after all a return to the equity holders by definition.

[klonk]

bla bla bla bla bla bla bla bla. irrelevant bit. bla bla bla bla

right you are, james.

[JeanD]

I heard they tried to put the Caulker transfer fee as working capital. That's when the auditors drew the line.

[klonk]

I heard they tried to put the Caulker transfer fee as working capital. That's when the auditors drew the line.

yep... bloke's a liability. (boom-boom)

[Shepherds Mush]

Interest on shareholder loans would be met by profits and ultimately cashflow from the club in the 1st place. If insufficient, then shareholders would need to inject money to pay off.

Let me get this right. You are saying that if the club doesnt have the funds, the shareholders would pay money into the club to pay the interest they are owed.

[Shepherds Mush]

yep... bloke's a liability. (boom-boom)

A proper Contingent

[James1979]

Let me get this right. You are saying that if the club doesnt have the funds, the shareholders would pay money into the club to pay the interest they are owed.

Options are 1) club pays out of its profits (ultimately cashflow). If no profit to do this then 2) add the interest to the loan. If they want it paid then need to get from elsewhere. Could raise 3rd party debt or ask other shareholders to stick money in to repay their loan. I think must be difficult to raise 3rd party debt as otherwise we'd have more than 5m or whatever it is. But ultimately if they want shareholder loan repaid, where's cash going to come from? They are owed money by a company they own.